Nearly 92 per cent of the under-construction residential units in Chennai are concentrated in the south and west micro markets of the city, revealed a recent survey.
A study conducted by a global property consultancy Knight Frank, showed that south Chennai will continue to see growth, over the next six months, owing to the network of employment hubs, improving social infrastructure and lower prices in the area.
The company’s chief economist and national research director Samantak Das said Chennai market seems to be bottoming out this year and is close to a point of recovery in terms of sales numbers.
ADVERTISEMENT
“New launches are coming down at a faster rate than sales for the first time in the last 5 years. But Chennai remains the healthiest among its southern peers. Residential market is in consolidation mode. Infrastructure projects such as Metrorail will definitely lead to growth,” he said.
During the first half of 2015, south Chennai micro market covering Kelambakkam, Guduvancheri, Sholinganallur, Chrompet and Perumbakkam saw an increase in its market share of launches. Whereas, Pallavaram, Perumbakkam and Kelambakkam saw the highest development with 5,800 units launched during the same period.
One-third of the units launched during the first half of 2015 were in west Chennai in areas like Porur, Ambattur, Mogappair, Iyyappanthangal and Sriperumbudur which offered affordable homes. Kundrathur and even Chembarambakkam saw a hike in development interest.
ADVERTISEMENT
Relatively affordable residential prices, proximity to employment hubs and improving social infrastructure continue to drive both the south and west micro markets.
North Chennai areas such as Tondiarpet, Kolathur, Madhavaram and Perambur saw negligible launches during this period due to the lack of social infrastructure and poor connectivity to the city centre.
However, it did witness a spike in development interest during the second half of 2014 but dipped in 2015.
Micro markets in Central Chennai, on the other hand, like Nungambakkam, R.A. Puram, Alwarpet, T.Nagar, Mylapore, Royapettah, Kilpauk, Anna Nagar, Teynampet and Adyar, with higher appetite for premium residential developments, has been insulated from market vagaries.
With the increase in redevelopment of bungalows into apartments in central locations, the breakdown of joint families among the affluent and the dearth of lifestyle residential products have been strong drivers of the premium segment.
The bulk of the launches, during the first half of 2015, were seen in Pallavaram and Perumbakkam situated on the corridor between OMR and GST Road with the highest price movement at 4 percent year-on-year. The strengthening of prices, despite the increase in supply, underscores the high residential attractiveness of these locations.
The Chennai office space market continues its healthy consolidation on the back of dwindling office completions, steady demand and falling vacancy levels. The total stock in the Chennai office space market stands at 58.2 million sq ft, of which 47.1 million sq ft is occupied.
While traditionally, this space has been anchored by IT/ITES sectors, in recent times, the Banking Financial Services and Insurance sectors were gaining.
The peripheral business districts of OMR and GST saw a spurt in demand while the central business district covering Anna Salai, R.K.Salai, Nungambakkam, Greams Road, Egmore and T.Nagar experienced a fall in market share during the first half of 2015. This can be attributed to the high rentals and a lack of viable office stock.